ISLAMABAD: The Power Division has requested the National Electric Power Regulatory Authority (Nepra) to amend licensing regulations for power distribution companies (Discos) to facilitate private sector participation (PSP) in their operations. The proposed changes aim to align Discos’ licenses with the evolving regulatory framework and federal government policies.
Key amendments include allowing electric power suppliers to sell electricity to others through bilateral agreements. However, for transactions involving a supplier of last resort, rates and terms must be approved by Nepra.
Nepra had issued Supplier of Last Resort and Distribution Licenses to most Discos in 2023, with a directive for these entities to separate their supply and distribution operations by 2025. However, the Power Division argues that this requirement conflicts with the federal government’s Eligibility Criteria Rules, notified in September 2023.
The Power Division also highlighted the risks of regulatory inconsistencies, which could deter potential investors and delay PSP initiatives. The proposed amendments aim to:
Remove mandatory legal separation of supply and distribution functions, retaining functional separation instead.
Align licenses with the National Electricity Policy, Plan, and applicable regulatory frameworks.
Address potential legal and investment risks while supporting market readiness for retail competition.
The government’s intent is to transition from a wholesale to a retail power market, gradually allowing legal separation of functions as the market matures. Power Division emphasized that any changes to licenses should remain contingent on future policy developments and market evolution.
The requested revisions reflect global best practices and aim to create a more investor-friendly regulatory environment, ensuring a smoother PSP process for Discos. Nepra is expected to take cognizance of the matter and incorporate the proposed amendments into its licensing framework.
Story by Mushtaq Ghumman
